September 22, 2021

Product Liability Practice Tip #9: Five Ways to Work WITH Your Underwriters!

For adjusters and other claims people, it’s so easy to start to view underwriters as adversaries. An old joke told by many adjusters is that, “Doctors bury their mistakes — underwriters simply pass theirs on to the claims department.”


Adjusters often feel that underwriting is the glamor spot in the insurance hierarchy and that the claims people are a necessary evil, sweating down in the boiler room so that the luxury yacht can forge ahead.

Underwriters high-five each other after hitting their premium production goals — maybe collect bonuses for doing so —  while months later the proverbial chickens come home to roost and the #$&^ hits the fan in the adjuster’s face in the form of claims spawned by marginal or sub-marginal accounts put on the books. (“OK, the loss ratios suck… but boy, did we hit those production targets!!”)

Adjusters must deliver the unwelcome message many times that certain types of losses or claims are not covered. Irate policyholders or insurance brokers may even appeal to the underwriting department to bring the adjuster to heel and to reverse a coverage decision for political reasons.

For whatever reason, it is easy for adjusters to feel a sense of rivalry if not downright antagonism toward their brethren in the underwriting wing of the department.

This is understandable at times but also a mistake.

In the realm of product liability losses in particular, it is critical that collaboration reign amongst the claims people and the underwriters. In fact, adjusters can and should take initiative to extend a hand and build bridges with underwriters. This will benefit both the claims person and the underwriter.

What are best practices in terms of working with underwriters?

Here are five ideas.  Best practice is to work with underwriters to provide a claims perspective on:

         Emerging risk areas that you see in loss trends;

         Perceived threats “over the horizon” that may not yet be manifest in claims;

         Red-flag danger “recipes,” like low insurance limits on companies that make products with catastrophic loss potential;

         “Claim control” issues like: choice of counsel, insured input on settlement,  insured’s autonomy in self-insured retentions, account proclivity  toward  do-it-yourself claims-handling, etc.;

         Drafting customized claim protocols for high-SIR accounts.

Build good relationships with underwriters.  Don’t view them as The Enemy!  So, please don’t malign underwriters.

After all, so of my best friends are underwriters.


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